How Section 8 Rent Is Calculated: A Simple Guide for Tenants

Many families ask the same question during their search for affordable housing: “How is Section 8 rent calculated?”

The answer is that Section 8 housing — both Housing Choice Vouchers (HCV) and Project-Based Rental Assistance (PBRA) — follows HUD rules to make sure rent is affordable. The general rule is that tenants pay 30% of their adjusted monthly income toward rent and utilities.

Here’s a closer look at how the calculation works.

Step 1: Determining Household Income

HUD requires families to report all sources of income, including:

Wages from employment
Social Security, pensions, or disability benefits
Child support or alimony
Any other recurring income

Property owners and managers exclude certain income, such as earnings of minors or specific benefits.

Step 2: Adjusting Income with Allowances

HUD makes adjustments to income before calculating rent. These deductions help ensure rent remains affordable for households with additional expenses. Common allowances include:

$480 for each dependent
$400 for elderly or disabled households
Unreimbursed medical expenses (for eligible households)
Child care expenses needed to work or attend school

After deductions, we call the result ‘adjusted income.’

Step 3: How Section 8 Rent is Calculated

Once the owner or agent calculates the adjusted income, tenants generally pay 30% of that amount toward rent and utilities.

For example:

Household adjusted monthly income = $1,500
30% of $1,500 = $450
Tenant pays $450 toward rent + utilities

HUD or the housing provider then covers the remainder of the approved rent through subsidy payments.

Step 4: Considering Payment Standards and Utility Allowances

For voucher holders, the Payment Standard (set by the local Public Housing Authority) sets the maximum subsidy. If the chosen unit’s rent is higher than the payment standard, the family may need to pay more (within HUD limits).

For PBRA tenants, HUD agreements set the contract rents, and tenants still pay roughly 30% of adjusted income.

They will factor in utility allowances as well. If tenants pay utilities directly, a standard deduction ensures their share doesn’t exceed affordability limits.